Earlier this year, Attorney General Bob Ferguson’s Antitrust Division began investigating a practice in fast-food chain contracts called “no-poach” clauses. These clauses prevent workers from moving to another of the chain’s franchise locations to earn a better paycheck — causing employees at fast-food restaurants to experience restricted mobility and stagnant wages thanks to decreased competition.
This practice has long been customary in the fast-food industry but is directly in violation of the antitrust provisions in the state Consumer Protection Act. Yesterday, Ferguson announced that seven large, corporate fast-food chains are required to end their no-poach practices immediately or be faced with a lawsuit from the Washington State Attorney General’s Office. The seven companies — McDonalds, Carl’s Jr., Jimmy John’s, Arby’s, Buffalo Wild Wings, Cinnabon, and Auntie Anne’s — have agreed to amend all no-poach clauses in their Washington contracts in the next 120 days.
Ferguson’s requests apply to all nationwide locations, as well: The companies are required to eliminate no-poach language from contracts as they come up for renewal, and until then, the clause cannot be enforced. This action will immediately affect tens of thousands of low-wage fast-food employees at over 25,000 locations nationwide, including those in Puerto Rico.
“Companies must compete for workers just like they compete for customers,” said Ferguson. “They cannot manipulate the market to keep wages low. My goal is to unrig a system that suppresses wages in the fast food industry.”
Ferguson is now investigating other corporations that use no-poach clauses, and he expects that there will be more fast-food chains that agree to remove these clauses from their contracts to avoid a lawsuit in the future.